I own a real estate bookkeeping company so I thought I'd share some advice on what to look for when hiring a bookkeeper. This is the same advice I'd give someone even if they were never going to hire us.

The biggest thing to understand is that knowing QuickBooks and understanding real estate bookkeeping are two very different things.

Real estate can get complicated quickly. ie. multiple properties, LLCs, mortgages, security deposits, rehab costs, closing statements, owner contributions and distributions, property sales, etc. You want someone who actually understands what they're looking at, not someone who's simply categorizing transactions.

Here are some questions I'd ask:

• How much experience do you have specifically with real estate? Ideally, they've worked with investors, landlords, developers or property managers similar to you.

• How will you track each property? If you own multiple properties or entities, ask how they'll structure the books so you can actually see how each property is performing.

• Do you understand repairs vs. capital improvements? Not everything that leaves your bank account should simply be categorized as an expense.

• How do you handle property purchases and sales? Ask about closing statements, mortgage principal vs. interest, loan balances, acquisition costs and proceeds from sales.

• How do you handle security deposits, owner contributions and distributions? These are areas where I've seen books get messy very quickly.

• Are ALL bank and credit card accounts reconciled every month? I'd specifically use the word "reconciled." Simply connecting the bank feed to QuickBooks isn't the same thing.

• Who will actually be doing my books, and does anyone review their work? If you're hiring a firm, find out who your actual bookkeeper will be and what their quality-control process looks like.

• Are my books being maintained with year-end taxes in mind? Your tax preparer shouldn't have to spend hours figuring out what happened during the year. Good bookkeeping should make tax preparation much easier.

• Will we periodically review the financials together? You should be able to understand how your properties are performing, not just receive a P&L by email every month.

• Can I speak with a couple of current real estate clients? References can tell you a lot about accuracy, communication and reliability.

One that's often overlooked: SECURITY.

Think about what you're potentially giving your bookkeeper access to — bank accounts, tax documents, tenant/vendor information and a tremendous amount of sensitive financial data.

Ask whether they use multi-factor authentication, professional antivirus/endpoint protection, secure password management and secure document sharing. If they have employees or contractors, ask who has access to your information and how that access is controlled.

I'd also ask what they're willing to do to let you evaluate the quality of their work before making a big commitment. That could mean no long-term contract, a trial period, or even completing the first month and reviewing everything with you on Zoom before expecting payment.

Finally, I wouldn't automatically choose the cheapest option.

Bad bookkeeping can look perfectly fine for months because the bank feed is connected and transactions are categorized. The problems often aren't discovered until a CPA, tax preparer, lender or another bookkeeper actually looks at the balance sheet and starts reconciling everything. By then, you may be paying someone else thousands of dollars to clean it up.

You want accurate books, someone who understands real estate, strong communication, good security, tax-ready financials and someone who's willing to stand behind their work.

If you can find those things, you've probably found a good real estate bookkeeper.

Best of luck!

Steve